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Journal Article
Convexity of the Phillips Curve and Difficulty of Monetary Policy to Fight against Inflation
by Séverine Menguy
Abstract
We propose a theoretical model that underlines the implications of a non-linear Phillips curve for the difficulty of monetary policy to fight against inflationary tensions similar to those encountered in 2021 and 2022 at a worldwide level, due to the resumption of demand after the COVID crisis and to the war in Ukraine. In such non-linearities, the interest rate becomes an asym [...] Read more